Saturday, November 9, 2013

NYT: Why Some People Can’t Keep Their Insurance Plans

Despite repeated assertions by
President Obama that people who like their health insurance will be able to keep
it under the new health care law, many people who bought insurance on their own
— a small fraction of the insurance market — will have to buy new plans.Related
Article »

If a policy was in effect when the law passed in March
2010 and has not been changed significantly, people already on the plan could
remain on it, and the plan would not have to meet the new requirements.

... but many people will need to purchase a new plan
because:

• Many plans do not currently meet the law’s standards
for coverage.

• Most people in the individual market do not keep their
policies for more than a year, so most would not be eligible to be
grandfathered.

• Insurance companies cannot change grandfathered plans
or sell them to new customers, so they have incentive to cancel the
policies.

Some people will also move to Medicaid coverage.

More than one million low-income adults currently in the
individual market will be newly eligible for Medicaid in 2014 because they live
in a state that has decided to expand the program.

Why Rates Are Increasing for Some People

The total cost of policies will be higher on average
...

Many plans offered on the individual market will have
more benefits and more consumer protections than they did before. The pools will
also cost more for insurance companies since they cannot deny people with
pre-existing conditions.

In the individual market,

on average, rates for group will:

... but people will be affected differently
...

INCREASE

DECREASE

SEX The law bans
insurers from charging women higher premiums than men of the same age.

MEN

WOMEN

AGE The law bans
insurers from charging older adults more than three times the amount they charge
younger adults.

YOUNG

OLD

HEALTH The law bans
insurers from charging people with health problems more.

HEALTHY

UNHEALTHY

... and many people will be eligible for government
subsidies.

An estimated 48 percent of people on the individual
market will be eligible for tax credits to reduce their costs, based on their
income level.